How to Stay on Top of your Finances

Know what the number one source of worry is? If you said money, then you probably have an IQ above 27. Clearly, any article with the above title that asks that question is likely to give that answer. If you didn't get it right, that's OK. But it happens to be true, according to lots of articles you can find on the internet. Now, some people don't worry at all about money. They are people like Bill Gates and Rupert Murdoch. Although, if you think about it, they probably worry about it because there's so much of it for them to worry about. Can you imagine trying to keep track of $25 billion? No matter how secure it might be, I'd be paranoid that someone, somewhere, was at this very moment making off with some of it. So the answer to money worries may not be acquiring several billion dollars. But how about a few million? I think you could handle that, don't you?

In any case, our finances need to be stayed on top of, or else they go away. Does that fit with your experience? When the bills achieve K2 height and the checking account is at Marianas depth, don't you scream out, "What the **** happened to our money?" Sure you do. This article will give you a few solid tips that will help you to tame that puppy.

1. Use Cash Wherever You Can

Finances are tricky. They don't like you to know how much money you're spending. And using your ATM card or checkbook helps your financial situation stay hidden. Pay attention the next time you're standing in line at the grocery checkout. Stop reading about Britney and Justin for a minute and look at what the people ahead of you are using to pay for their items. The women tend to use their checkbooks. The men tend to use ATM cards. Very few use cash. Why is that? I don't know. What I do know is that they can keep using those tools and never see any difference in how much they have left. The ATM card doesn't get smaller. The checkbook looks pretty much the same. So it's easy to spend more than you should. But what would happen if you allowed yourself only a certain amount for your cash expenses each week (anything that can be paid with cash easily:groceries, gas, movies, etc.), took it out from your ATM once a week, and used it, rather than those other means of paying for stuff? You would see how much you have left, and know whether or not you can eat out for lunch or whether you have to pack a sandwich from home. As an added benefit, you might save on those ATM fees you get charged for using outlets other than your bank's machines. Consider: A $2.50 fee, every time you withdraw another $20. That's equivalent to paying an interest charge of 13 percent! Take out once per week, and get it from your bank's network and you'll be keeping more for yourself and giving away less for those rich bank owners.

2. Set Aside Money for your Regular Bills

Question: How much money do you have available to spend right now? If you're like most people (and you are, you know it), you'll check how much is in your checking account (you probably have to go online to get that figure, don't you? Your checkbook register...well, let's just leave that alone for now, shall we?). So you see that, at this very moment, there are $2,641 and 90 cents in there. So, that's your answer? But what about the rent that's coming up in a few days? And what about the cell-phone bill that's due on the 14^th? See, you really don't have that $2,641.90 available to spend. It's there, but some of it's going to have to go to things that come due every month. And what about the auto insurance that comes due annually? I developed a nifty little spreadsheet that lets me allocate the funds in my account to things that I know will be coming due at a time certain, unless the Apocalypse really is now. To download a free sample (in Excel format) click here.

Using a system like this will mean that you will have money in the bank to meet your obligations, and money to save for things you want. Wouldn't it be cool to have the cash available for Christmas presents instead of digging yourself in a credit card hole that takes you months to get out of every new year? That's if you ever climb out. The credit card people thank you warmly for taking care of them, but wouldn't you rather be taking care of you?

3. Speaking of Credit Cards...

Credit cards are the easiest way to get into financial trouble. If you're already in trouble, get thee to a legitimate credit counseling operation (see ClarkHoward.com for a list). Do NOT go to the ones advertised on TV. If you have not yet been made into an indentured servant, here's some worthwhile advice: Keep one card, and use it only for convenience, not for buying things you don't have the cash to pay for. Pay the balance off every month. You can even use a card that gives rewards. The one I use gives me 2% back on every purchase, to be used towards any new or used car purchase or lease. Pretty sweet.